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I used to watch TV news and yell at the box. Now I jump up from the couch, sit at the computer and begin to type laughing maniacally saying "Wait until they read this." It's more fun than squashing tadpoles

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Tuesday, June 10, 2008

Professor Claims Va. Lottery Misrepresents Prizes

While private lotteries are illegal in Virginia, the State enjoys a monopoly on gambling with the exception of bingo games operated by charitable organization. The reason for this is the state fears it cannot prevent fraud if someone other than the state were to be free to offer lotteries or numbers games, or it would invite the participation of organized crime. As has been found in most government programs however; the lottery as run by the State of Virginia not only offers poor odds but it has been discovered that it sells tickets that have zero possibility of winning.

Monday, a Roanoke law firm announced its intention to sue the lottery on behalf of Scott Hoover, an associate professor at Washington and Lee University who teaches applied business statistics. The letter that lawyer John Fishwick sent to the state claims the lottery has violated its contract with scratch ticket buyers by purposefully selling tickets that have no chance at all of winning a top prize.

"We estimate that since 2003, the state has sold over 26.5 million losing tickets in this way, pocketing an estimated $84.7 million in purchase prices from the shell game," Fishwick said. "The state cannot continue to boost revenues by knowingly selling its citizens defective tickets based on hollow promises of an opportunity that does not exist."

There are severe penalties for individuals who violate the gaming laws of perpetuate such a fraud but the politicians have made quite plain that the State be free from such worries.

Virginia Code
§ 18.2-334.3. Exemptions to article; state lottery.

Nothing in this article shall apply to any lottery conducted by the Commonwealth of Virginia pursuant to Chapter 40 of Title 58.1.

So it is no surprise that this action by the State Lottery Board is intentional. When there is no threat of penalty there is nothing to stop fraud even by the government.

Hoover began tracking the data the lottery posted on its Internet site about how often top prizes were given out in scratch games and realized "the numbers posted online violated basic laws of statistics."

Working with Fishwick's firm, he filed Virginia Freedom of Information Act requests and learned that by July 24, 2007, three days before he bought his tickets, all of the grand prizes had been given out for that particular batch. "When I bought these, there was zero chance to win the $75,000 prize," Hoover said.

Hoover alleges that the state has done the same thing in all its scratch games, leaving batches of tickets on sale after all the grand prizes from the batch are claimed, instead of telling retailers to pull the "stale" tickets and replace them immediately with a new batch.

When a game is popular, the state will in fact print a new batch of tickets, which has a new set of top prizes. Yet it will let the entire first run of tickets sell out, even if all of the top prizes for that run have been claimed, Hoover asserted. Thus it's possible for someone to buy a ticket from the old batch, thinking he's eligible for one of the new prizes, when that ticket has no chance of winning.

The State cannot claim ignorance either. Last year the State of Texas lottery was found to have been doing the very same thing. A State Senator forced the government to stop the practice. It would be a stretch to believe the members of the Virginia State Lottery were not aware of the results of the Texas controversy, yet they continued the fraud believing somehow they would never be caught.


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6:34 PM  

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